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The Wall Street Journal reported today that Geely has offered Ford $2.5b for Volvo, making the Chinese automaker the “leading contender” for the Swedish brand.

Are there other contenders we don’t know about? According to the WSJ, “the offer is higher than Ford or outsiders had expected for a brand that has lost more than $1 billion in recent years,” and yet the latest news from China [via Xinhua] has Alan Mulally saying there’s been “no new progress” in the ongoing negotiations. Now don’t get it twisted: nobody expects Mulally to publicly accept this kind of offer within hours of being reported, but you’d think he’d at least send encouraging signs. Instead Mulally tells Xinhua “Volvo is a good brand, but Ford will sell it in order to shift its main focus on developing the Ford brand.”

Which is like someone on Craigslist talking about the sentimental value of an item with the words “or best offer” attached to the asking price. The fact that Geely has made an offer for 100 percent shows that they’re serious (that used to be a Ford negotiating point). So what’s Big Alan waiting for? Offload the money-loser, snag some cash and move on. The deal doesn’t look to be getting any sweeter.

HONG KONG (Reuters) - Geely Holding's attempt to buy Ford Motor Co's (F.N) Volvo car unit is in danger of stalling over disagreements about intellectual property rights, a source close to the talks said on Wednesday.

Representatives from Ford and Geely, parent of Hong Kong-listed car maker Geely Automotive (0175.HK), have been discussing a sale, for around $2 billion, since early this year.

The latest talks, being held in London, are focused on the U.S. car maker's concerns about sharing its proprietary technology and plans for new products, said the source in response to a Reuters query about an earlier Bloomberg report.

An impasse on that issue could scupper the negotiations.

Ford said talks were ongoing with interested parties regarding the sale of Volvo. "We have been consistently stating that this process will take some time to unfold, and that is still the case," a spokesman said.

Geely said last month it was considering a bid for Volvo along with a local government-backed investment firm.

It also said a Goldman Sachs (GS.N) affiliate was investing $334 million in Geely Auto via convertible bonds and warrants, a move widely seen as boosting Geely's growth ambitions.

Buying Volvo would give Geely, China's tenth-biggest autos manufacturer, access to the technology it needs to upgrade its cars. But for Ford, that could be a reason to hold back from a deal.

Last week, a former Ford engineer, Xiang Dong Yu, was arrested and charged in the United States with stealing trade secrets from Ford and using them to try to get work with Chinese auto makers.

"I'm not at all surprised that intellectual property rights would be a roadblock in the Volvo sale as IPR has always been an issue in China," said Boni Sa, analyst at CSM Worldwide, a global industry consultancy.

It's on the build list right now, as long as everything goes smoothly in my life I will be picking it up around Christmas. R-Design in Titanium Gray.

Sharp! My fave small car design on the market since it came out.

Perhaps Ford worries selling Volvo to Geely will make give the Chinese maker consumer credibility with the brand-name, instantly creating an new competitor in Europe and North America. Maybe they'd prefer to sell the brand to a manufacturer already in the marketplace. *shrug*

Similar article on Bloomberg today which brought up an interesting albeit obvious point that I never quite realized. In Europe and elsewhere in the world, Ford only has the Ford brand since Lincoln and Mercury are in North America only. I can easily see them deciding to hang onto Volvo if sales continue to improve along with the economy as a whole.

Volvo has done well the past few months, they could do much better. The problem is nobody knows what they have to offer right now. Advertising is nearly non existent in N/A. The only ads are from the dealers themselves.

Ford made a huge mistake selling Jaguar off before their new products had a chance to prove themselves in the marketplace, and the XF looks like it's going to be a solid hit. I would hope that Mulally gives the new S60 a chance under Ford before selling them.

Also, Lincoln's chance to be a global brand has passed and if Ford wants to take on Lexus when their finances get straightened out, they need the Volvo name.

Volvo's a good, strong brand that should come alive with new design and the Ecoboost engines.

Volvo already offers better engines than Fords Ecoboost. Their diesels are great, have plenty of power, get good mileage, and they have quite a few variations. Their T5 is so good Ford borrowed it for the Focus RS and their 2.4i 5cyl is a solid engine as well. But yes, Whether the average enthusiast likes the new (2011) designs or not, the average consumer will love them. Like I said they just need to advertise. When you say Volvo people think boxy, pre-casket transportation.

Keepclam, I've liked the design of the car since I saw one in the parking lot of my work. Then I test drove it and was sold. I know that things dont always go as planned though so I'll be happier when I'm done signing papers on it.

By NORIHIKO SHIROUZU
BEIJING— Ford Motor Co. has selected a group led by China's Geely Holding Group Co. as the preferred bidder for the U.S. company's Volvo unit, marking an important step forward for what would be the most ambitious international expansion so far by a Chinese car maker.

Wednesday's announcement means that Ford and Geely, one of China's biggest privately owned auto makers, are in exclusive negotiations over Volvo, but it doesn't ensure that the companies will reach a deal. A senior Geely executive said it isn't clear how much longer negotiations might last.

Still, Ford's decision is the strongest sign of progress in Geely's years-long pursuit of Volvo, which Ford acquired in 1999 for $6.4 billion and which it decided to sell last year amid losses at the Swedish unit. The decision comes amid concerns in Sweden about the potential fate of Volvo under Geely ownership and follows recent tension in talks between Ford and Geely over how to handle certain intellectual-property rights in any sale.

In a statement, Geely stressed that it is committed to maintaining Volvo's existing production and research facilities, as well as union agreements and dealer networks, and said that the company would remain headquartered in Gothenburg, Sweden, and be led by independent management. Geely, which said its bid is supported by Chinese banks, also promised to "enhance Volvo's access to sales networks and sourcing opportunities" in China's fast-growing market.

"We are delighted with the progress of our discussions with Ford," Li Shufu, founder and chairman of Geely, said in a statement. "Should a final agreement be reached, Geely will safeguard and strengthen Volvo's world-renowned brand heritage, ensuring its continued leadership as a premium car company with a global reputation for safety and environmental technologies."

Volvo welcomed Ford's decision. "It's good for us to have a clear indication of where the process is going so we can move forward," said Volvo Cars spokeswoman Maria Bohlin.

US auto giant Ford said on October 28, 2009 that China's largest independent carmaker Geely Automobile is its "preferred bidder" in talks over the sale of Swedish unit Volvo.
.Lewis Booth, Ford's chief financial officer, said in a statement that "Ford believes Geely has the potential to be a responsible future owner of Volvo and to take the business forward while preserving its core values and the independence of the Swedish brand." But he added that "there is much work that needs to be completed" and that "we have no specific timeline to conclude the discussions."

Ford said it doesn't plan to keep a stake in Volvo after any sale, although it would continue to cooperate with the Swedish company.

The Geely bid had recently been in danger of stalling over the intellectual-property issue, according to people familiar with the talks. At issue were questions over which technology Ford would transfer to Geely and at what price, as well as how the two companies would handle any possible disputes over technology down the road.

It isn't clear whether those questions have been entirely resolved. But a senior Geely executive said the two companies had made progress on key issues. Geely's negotiators returned to China over the weekend from Europe, where they held talks with Ford representatives.

Geely's bid is the most prominent part of a broader push by Chinese companies, many of them cash-rich, to acquire foreign brands and technology at a time when established car companies elsewhere have struggled.

Sweden's other major car brand, General Motors Co.'s Saab, is also involved in a deal involving a Chinese company. Earlier this year, Beijing Automotive Industry Holding Co. agreed to take a minority stake in Swedish sports-car maker Koenigsegg Group AB, a consortium that includes Koenigsegg Automotive founder Christian von Koenigsegg , and help the group fund a bid for Saab. Beijing Auto aims to gain access to Saab's vehicle technology—much of which comes from GM and its Opel unit—in return for helping to revive Saab by increasing its sales in China.

Geely, whose Geely Automobile Holdings Ltd. unit lists shares in Hong Kong, aims to use its Chinese engineers to conduct basic engineering tasks for Volvo like generating digital blueprints of parts designed by more seasoned engineers in Sweden, according to people familiar with Geely's plans. It has hired consultants to advise it on the acquisition, including a former top executive at Volvo.

The head of the engineering union at Volvo Cars said Wednesday he had concerns about the Geely bid. Magnus Sundemo in a telephone interview he was uneasy about another foreign owner of Volvo and questioned whether Geely would take the time to understand the company's culture and invest in the brand.